SUBSCRIPTION AGREEMENT
Exhibit
10.1
The
undersigned has received and read the Confidential Private Placement Memorandum
dated December 14, 2006 ("Memorandum"), pursuant to which, DRS Inc., a Nevada
corporation ("Company"), is offering for sale to the undersigned shares of
the
Company's $.001 par value common stock at a purchase price of $0.75 USD per
share ("Offered Shares"). The terms used and not defined in this Subscription
Agreement have the meanings specified for such terms in the
Memorandum.
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1.
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Subscription.
On the terms and subject to the conditions of this Subscription Agreement
and the Memorandum, the undersigned hereby subscribes for the number
of
Offered Shares of the Company, specified below for a subscription
price of
$0.75 USD per Offered Share. The undersigned hereby agrees that this
subscription shall be irrevocable and shall survive the death or
disability of the undersigned. Payment of the purchase price for
the
Offered Shares is due upon
subscription.
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2.
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Acceptance
of Subscription. The undersigned acknowledges that (i) the
Company has the right to accept or reject this subscription in whole
or in
part, and (ii) this subscription shall be deemed to be accepted by
the
Company only when this Subscription Agreement is signed by the Company.
The undersigned agrees that subscriptions need not be accepted by
the
Company in the order in which subscriptions are
received.
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3.
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Representations,
Warranties, and Covenants of the Undersigned. The undersigned
hereby represents and warrants to and covenants with the Company,
the
Company's officers, directors, employees, attorneys, agents and any
person
who has solicited this subscription as
follows:
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(a) The
undersigned has adequate means of providing for his or her current needs and
possible personal contingencies, and he or she has no need in the foreseeable
future to sell the Offered Shares. The undersigned is able to accommodate the
economic risks of the undersigned’s signature purchased of Offered Shares, and
the undersigned has sufficient net worth to sustain a loss of his or her
investment in the Company, or a portion thereof, in the event of such loss
should occur.
(b) The
undersigned has such knowledge and experience in financial and business matters
that he or she is capable of evaluating the merits and risks of an investment
in
the Company.
(c) The
undersigned confirms that all documents, records and books, pertaining to his
or
her proposed investment in the Company have been made available to the
undersigned.
(d) The
undersigned has had an opportunity to ask questions of and receive satisfactory
answers from the Company, or any person or persons acting on the Company's
behalf, concerning the terms and conditions of his or her proposed investment
in the Company, and all such questions have been answered to the complete
satisfaction of the undersigned.
(e) The
Offered Shares will be acquired by the undersigned for his or her own account
for investment in a manner which would not require registration or qualification
pursuant to the provisions of the Securities Act of 1933, as amended ("Act"),
or
any state Blue Sky law.
(f) The
undersigned understands that the offer and sale of the Offered Shares in the
individual states in transactions which satisfy the requirements of Rule 504
of
Regulation D promulgated pursuant to Section 4(2) of the Securities Act of
1933
are not required to be registered or qualified in the individual states because
of adoption of the National Securities Markets Improvement Act of 1996 ("NSMIA
"). NSMIA preempts state registration and similar qualification provisions
for
transactions exempt pursuant to that Rule 506.
(g) The
undersigned represents that it has been called to his or her attention by those
provisions of the Memorandum and by those persons with whom the undersigned
has
dealt in connection with his or her proposed investment in the Company, that
the
Company has no history of operation and no earnings and that the undersigned
proposed investment in the Company involves significant risks which may result
in the loss of that investment, or a portion thereof.
(h) The
undersigned has received no representations or warranties in making his or
her
investment decision.
(i) The
undersigned acknowledges and agrees that the Company has made available to
the
undersigned or his or her personal advisors the opportunity to obtain
appropriate information to evaluate the merits and risks of an investment in
the
Company.
(j) The
undersigned understands that neither the Securities and Exchange Commission
nor
any Securities Administrator or similar person of any state or province has
made
any finding or determination relating to the fairness of any purchase of the
Offered Shares and that neither the Securities and Exchange Commission nor
any
Securities Administrator or similar person of any state or province has or
will
recommend or endorse a purchase of the Offered Shares.
(k) The
undersigned is now a bona fide citizen of the United States of America and
a
bona fide resident of the state set forth below and the address and Social
Security number or federal tax identification number set forth below are his
true and correct residence and Social Security number or federal tax
identification number. The undersigned has no current intention of becoming
a
resident of any other state or jurisdiction. If the undersigned is a
corporation, partnership, trust or other form of business organization, the
undersigned represents and warrants that the undersigned was formed pursuant
to
the laws of_____________________, and the undersigned's principal
place of business is within such state, and that the undersigned was not
organized for the purpose of acquiring Offered Shares.
(l) The
undersigned hereby represents and warrants that the undersigned's total purchase
of Offered Shares shall not exceed 10% of the undersigned's net
worth.
(m) By
initialing where indicated and appropriate below, the undersigned
hereby represents and warrants that the undersigned is an
" Accredited Investor " , as defined by the provisions of Rule 501 of Regulation
D promulgated pursuant to the Act, and falls within one of the following
categories:
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(1)
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The
undersigned is a director or executive officer of the Company, or
any
director, executive, executive officer, or general partner of a general
partner of the Company; or
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Initials
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(2)
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The
undersigned is a natural person whose individual net worth, or joint
net
worth with the undersigned's spouse, at the time of his or her purchase
exceeds $1,000,000.00 USD; or
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Initials
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(3)
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The
undersigned is a natural person who had an individual income in excess
of
$200,000.00 USD in each of the most recent years or joint income
with the
undersigned's spouse in excess of $300,000.00 USD in each of those
years
and has a reasonable expectation of having the same income level
in the
current year; or
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Initials
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(4)
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The
undersigned is a trust, with total assets in excess of $5,000,000.00
USD,
not formed for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described
in
Regulation 230. 504(b)(2)(ii) promulgated pursuant to the Act;
or
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Initials
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(5)
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The
undersigned is an entity in which all of the equity owners are accredited
Investors.
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Initials
4. Indemnification.
The undersigned acknowledges that he or she understands the meaning
and
legal consequences of the representations, warranties, and covenants specified
in Paragraph 3 of this Subscription Agreement and that the Company has relied
on
such representations, warranties and covenants, and the undersigned hereby
agrees to indemnify and hold harmless the Company, and its officers, directors,
controlling persons, agents, attorneys, accountants, and employees, from any
and
all loss, damage or liability due to, or occurring because of, a breach of
any
such representation, warranty, or covenant.
5. Subsequent
Registration of Offered Shares. The undersigned has no right to require
that the Offered Shares be registered pursuant to the provisions of the Act,
or
otherwise. The undersigned further acknowledges and agrees that the Company
has
no obligation to assist the undersigned in obtaining any exemption from any
registration requirements imposed by applicable law. The undersigned also
acknowledges and agrees that he or she shall be responsible for compliance
with
all conditions on transfer imposed by a Securities Administrator or similar
person of any state, province or territory.
6. Limitation
on Transfer of Offered Shares. The undersigned acknowledges and agrees
that he or she is aware that there are substantial restrictions on the
transferability of the Offered Shares. Because the Offered Shares will not
be
registered pursuant to the provisions of the Act (unless the undersigned
exercises his or her right to require such registration), the undersigned agrees
not to sell, transfer, assign, pledge, hypothecate or otherwise dispose of
any
Offered Shares unless such sale is exempt from such registration pursuant to
the
provisions of the Act or unless the Offered Shares are registered pursuant
to
the Act. The undersigned further acknowledges and agrees that the Company has
no
obligation to assist the undersigned in obtaining any exemption from any
registration requirements imposed by applicable law. The undersigned also
acknowledges and agrees that he or she shall be responsible for compliance
with
all conditions on transfer imposed by a Securities Administrator of any state,
province or territory and for any expenses incurred by the Company for legal
and
accounting services in connection with reviewing such a proposed transfer and
issuing opinions in connection therewith.
7. Compliance
with Act. The undersigned understands and agrees that the following
restrictions and limitations are applicable to his or her purchase and any
sale,
transfer, assignment, pledge, hypothecation or other disposition of Offered
Shares pursuant to Section 4(2) of the Act and Rule 504 of Regulation D
promulgated pursuant thereto:
(a) The
undersigned agrees that the Offered Shares shall not be sold, pledged,
hypothecated or otherwise disposed of unless the Offered Shares are registered
pursuant to the Act and applicable state or other applicable securities laws
or
are exempt there from.
(b) A
legend in substantially the following form has been or will be placed on any
certificate(s) or other documents evidencing the Offered Shares:
THE
SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT ONLY AND HAVE NOT BEEN REGISTERED PURSUANT TO THE PROVISIONS OF
THE
SECURITIES ACT OF 1933 AS AMENDED ("ACT"), AND HA VE BEEN OFFERED AND SOLD
IN
RELIANCE UPON THE EXEMPTIONS SPECIFIED IN SECTION 4(2) OF THE ACT AND RULE
504
OF REGULATION D PROMULGATED PURSUANT THERETO. WITHOUT SUCH REGISTRATION, SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY OR ITS TRANSFER
AGENT
OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY OR ITS TRANSFER AGENT
THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMP
ANY
OR ITS TRANSFER AGENT OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE
COMPANY OR ITS
TRANSFER AGENT TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF
THE ACT, APPLICABLE STATE SECURITIES LAWSOR ANY RULE OF REGULATION PROMULGATED
PURSUANT THERETO.
(c) Stop
transfer instructions to the transfer agent of the Company have been or will
be
placed with respect to the Offered Shares so as to restrict the sale, transfer,
pledge, hypothecation or other disposition thereof, subject to the further
terms
hereof, including the provisions of the legend set forth in subparagraph (b)
above.
(d) The
legend and stop transfer instructions described in subparagraphs (b) and (c)
above will be placed on any new certificate(s) or other documents for
transfer.
8. Financial
Information. The undersigned has previously been furnished an Offered
Questionnaire which has been completed and executed by the undersigned and
the
information contained therein remains true and correct in material
aspects.
REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK
OFFEREE
QUESTIONNAIRE
DRS
Inc., a Nevada corporation ("Company") will use the responses to
this questionnaire to qualify prospective investors for purposes of federal
and
state securities laws.
If the
answer to any question below is "none" or "not applicable," please so
indicate.
Your
answers will be kept confidential at all times. However, by signing this
questionnaire, you agree that the Company may present this questionnaire to
any
person, as it deems appropriate to establish the availability of exemptions
from
registration pursuant to state and federal securities laws.
PART
I. INDIVIDUAL INVESTORS
Investors
that are not individuals (that is, are corporations, partnerships, trusts,
etc.)
should start at PART II.
1. Name
(as it should appear on stock certificate):
______________________________________________________________________
2. Residence
address: ________________________________________________
______________________________________________________________________
3. Home
telephone: __________________________________________________
4. Date
of birth: _____________________________________________________
5. Social
security number: _____________________________________________
6. United
States citizen:
If
no,
country of
citizenship:_______________________________________________
7. Occupation: ____________________________________________________
8. Number
of
years: _________________________________________________
9. Present
employer: __________________________________________________
10. Position/Title:
_____________________________________________________
11. Business
address: __________________________________________________
_______________________________________________________________________
12. Business
telephone: _________________________________________________
13. Business
fax: ______________________________________________________
14. Please
specify each state and foreign country in which you have maintained your
principal residence during the past three years, and the dates during which
you
resided in each:
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
15. Are
you registered to vote in, or do you have a driver's license issued by, or
do
you maintain a residence in any other state or country?
If
yes,
in which state and countries?
_______________________________________________________________________
16. Do
you reasonably expect that either your own income from all sources during the
current year will exceed $200,000 USD or the joint income of you and your spouse
(if married) from all sources during the current year will exceed $300,000
USD?
If
no,
please specify the amount:
$____________________________________________________________
17. Percentage
of your income (as shown above) anticipated to be derived from sources other
than salary:
_______________________________________________________________________________________
18. Was
your yearly income from all sources during each of the last two years in excess
of $200,000 USD or was the joint income of you and your spouse (if married)
from
all sources during each of those years in excess of $300.000 USD?
19. Will
your net worth as of the date you purchase the Offered Shares, together with
the
net worth of your spouse, be in excess of $1 million?
If
no,
please specify the amount:
$____________________________________________________________
20. Please
describe your educational background and degrees obtained, if any:
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
21. If
you have any existing personal or business relationship
with the Company or any of its officers, directors or controlling persons,
please describe the nature and duration of each relationship:
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
22. Please
describe in reasonable detail the nature and extent of your business, financial
and investment experience that you believe gives you the capacity to evaluate
the merits and risks of the proposed investment and the capacity to protect
your
interests:
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
23. Are
you purchasing the Offered Shares for your own account and for investment
purposes only?
If
no,
please specify for whom you are investing and the reason for investing:
____________________________________________________________________________________________________
_______________________________________________________________________________________
24. In
evaluating this investment, will you use the services of any of the following
advisors? If so, please identify , providing address and telephone
number:
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
25. Indicate
type of ownership in which securities will be held:
In
signing below, you acknowledge that the information provided in this
questionnaire is true and correct in all material respects and that you
recognize that the Company and its counsel are relying on the truth and accuracy
of that information in reliance on the exemption contained in Section 4(2)
of
the Securities Act of 1933, as amended, and Rule 504 and Regulation D. You
agree
to notify the Company promptly of any changes in the foregoing information
that
occur before the investment.
Executed
at ____________________________________, on ______________, 20_____
________________________________________________
(Signature)
________________________________________________
(Print
or
type name)
PART
II. NONINDIVIDUAL INVESTORS
Please
complete this PART II only if the proposed purchase is to be made by a
corporation, partnership, trust or other entity. If the investment will be
made
by more than one affiliated entity, please COMPLETE A COPY OF THIS QUESTIONNAIRE
FOR EACH ENTITY.
1. Name
(as it will appear on stock certificate):
______________________________________________________
2. Address
of principal place of business:
______________________________________________________
3. Jurisdiction
of formation or incorporation:
______________________________________________________
4. Contact
person:
_______________________________________________________
5. Telephone
number:
_______________________________________________________
6. Fax
number:
________________________________________________________
7. Type
of entity (corporation, partnership, trust, etc.):
________________________________________________________
8. Taxpayer
identification number:
___________________________________________________________
9. Was
this entity formed for the purpose of this investment?
If
yes,
all shareholders, partners or other equity owners must answer PART I of this
Questionnaire.
10. Amount
of your proposed investment: $ _______________________
11. Entity's
net worth at the time the securities will be purchased: $
_____________
12. Check
the appropriate box to indicate which of the following accurately describes
the
nature of the business conducted by the investing entity:
oPrivate
business
development company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940 (namely, a US venture capital fund that invests
primarily through private placements in non-publicly traded securities and
makes
available, either directly or through co-investors, to the portfolio companies
significant guidance concerning management, operations or business
objectives);
oA
small business
investment company licensed by the U.S. Small Business Administration pursuant
to Section 301(c) or (d) of the Small Business Investment Act of
1958;
oAn
investment company
registered pursuant to the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act;
oAn
insurance company as
defined in Section 2(13) of the Securities Act of 1933;
oAn
employee benefit plan
within the meaning of Title I of the Employee Retirement Income Security Act
of
1974 (a) whose investment decision is made by a fiduciary that is either a
bank,
a savings and loan association, an insurance company or a registered investment
advisor or whose total assets exceed $5 million or (b) if a
self-directed plan, whose investment decisions are made solely by persons who
are accredited investors;
oAn
organization
described in Internal Revenue Code Section 501(c)(3), a corporation, a
Massachusetts or similar business trust or a partnership, in each case not
formed for the purpose of this investment, with total assets in excess of $5
million;
oAn
entity not located in
the United States and whose equity owners are neither U.S. citizens nor U.S.
residents;
oA
trust with total
assets in excess of $5 million whose purchase is directed by a sophisticated
person as described in Rule 504(b)(2)(ii) under the Securities Act of
1933;
13. Please
provide information detailing the business, financial and investment experience
of the entity and investment manager of the entity:
__________________________________________________________________
__________________________________________________________________
In
signing below, you acknowledge that the information provided in this
questionnaire is true and correct in all material respects and that you
recognize that the Company and its counsel are relying on the truth and accuracy
of that information in reliance on the exemption contained in Section 4(2)
of
the Securities Act of 1933, as amended, and Rule 504 and Regulation D. You
agree
to notify the Company promptly of any changes in the foregoing information
that
occur before the investment.
Executed
at _________________________________, on ____________,
20___.
_________________________________________________________________
(Print
or
type name)
By:
______________________________________________________________
Title:
____________________________________________________________
SIGNATURE
PAGE TO SUBSCRIPTION AGREEMENT
Amount
of
shares Investor subscribed for_________. Subscription
Amount $ _________
Make
check payable to: DRS Inc.
EACH
SUBSCRIBER REPRESENTS THAT:
(a) The
information contained in this Subscription Agreement is complete and accurate
and may be relied upon, and
.
IN
WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement and initialed the foregoing statements and executed the included
questionnaire this _______ day
of,
20______.
FOR
INDIVIDUALS:
____________________________________
Print
Name
____________________________________
Signature
NAME
AND SIGNATURE OF JOINT TENANT OR TENANT IN COMMON
____________________________________
Print
Name
____________________________________
Signature
FOR
TRUSTS, CORPORATIONS, PARTNERSHIPS
__________________________________________________________________
Print
Name of Entity
By:
__________________________________________________________________
Print
name (Trustee, President or General Partner) of person(s) making investment
decision
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______________________________
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Signature
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Date
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_______________________________
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______________________________
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Signature
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Date
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Agreed
to and accepted by:
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_____________________________
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______________________________
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Date
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Mr.
Xxxxxx Xxxxxx, President
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